Crude oil stable as OECD inventories fall

USA sanctions are set to take effect in November, giving market participants some time to source new supplies. The U.S. decided not to recertify the deal that limited sanctions because Iran had negotiated in bad faith and was continuing to fund terrorism and conflict in the middle-east. That was then, this is now.

Oil prices rose on Monday (May 14) as Opec reported that the global oil glut has been virtually eliminated, while U.S. crude's discount to global benchmark Brent widened to more than US$7, its deepest in five months. "It is a way to enforce compliance on refiners around the world".

LONDON, May 14 (Reuters) - Oil prices steadied below 3-1/2 year highs on Monday as resistance emerged in Europe and Asia to US sanctions against major crude exporter Iran, while rising USA drilling pointed to higher North American production.

- Strong domestic gasoline demand has caused reduced supply levels.

"Nothing noteworthy will happen to our export of crude and condensate by the USA withdrawal", Zanganeh said.

Growth of non-OPEC countries offer is estimated to be 1.72 mln barrels per day in 2018, the OPEC reports. Despite these efforts to fill in for lost supply, analysts at Bank of America still expect oil to reach $100 per barrel in 2019.

Organization of the Petroleum Exporting Countries (OPEC), a 14-member oil producer group, raised its forecast for global oil demand in 2018 slightly, expecting the world to consume 98.85 million barrels a day, 1.65 million barrels a day higher than previous year.

US President Donald Trump directed his Secretaries of State, Energy, and the Treasury to significantly reduce the amount of petroleum and petroleum products bought from Iran, according to a memorandum released by the White House on Monday.

During April, refinery maintenance coupled with a release of floating storage volumes pushed Iran's crude and condensate exports to multi-year highs, although output remained stable, Platts reported in an analysis of the situation. Last month, the IEA left global demand forecasts unchanged in 2018 at 1.5 million b/d, slightly less than OPEC's expectations.

Turning to the latest developments, OPEC data showed that crude oil inventories in developed (OECD) countries continued to fall.

Non-Opec production remained flat for the second month at 58.6 million barrel per day in March because of higher production from the USA and the North Sea region, which was offset by other non-Opec members.

Crude oil prices continue to rally upwards mainly because of geo-political concerns and lower than expected Opec production, which remained flat at 31.9mbpd for April on MoM basis. With WTI's price above $70 a barrel, that increase wasn't surprising, ING strategists said in a note.